Regulatory onslaught to shrink capacity, spur rate increase, economist says

| December 06, 2013

eobr electronic logThe regulatory bottleneck heading toward the trucking industry in 2014 — and partly already in effect, headlined by the hours-of-service rule changes that went into effect July 1 — will further shrink the driver pool and the industry’s capacity and could lead to a 6 percent increase in truckload rates by the second quarter of 2014, said Eric Starks, president of research firm FTR. 

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Starks spoke at Ovedrive sister site CCJ‘s Fall Symposium in Scottsdale, Ariz., this week, where he told an audience of fleet executives that some estimates show that fleets will need to hire an additional 1.5 million drivers to maintain current productivity levels, due to regulatory changes that loom. 

He pointed to tightening emissions regulations in California, federal greenhouse gas and mpg regulations, electronic logging device mandate, speed limiter requirements and the already-underway hours-of-service changes as a concentration of regulations that will be what he called “game-changers” for the industry.

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Starks said his estimates show that fleets will need 150,000 to 200,000 additional drivers to maintain current productivity in the coming years, and the regulations will create a tough environment for smaller fleets and create barriers for newcomers to the industry. 

The 6 percent increase in truckload rates “is a good number,” Starks said,” but not as dramatic as the initial data suggests” due to a rate drop this summer. CCJ has a full write-up on Starks speech — Click here to read it.

  • guest

    Trucking is becoming too rediculous to be involved with…there is a regulation for every movement you make..who needs it? What a stress factory…….eventually it will give you Ulcers or heart conditions…..the PAY is CRAP for the 70 hour work week?? Are you kidding? What for?? To have some COP hassle you to death and CHARGE you a Fortune for whatever infraction he wishes to IMPOSE on you the “criminal” on wheels??? Really its a JOKE today…why bother with all this crap?? Whats the benefit?

  • Mike Broaddus

    The philosophy of the large trucking companies, ATA and state associations has always been that more regulation is better. They realize that the larger companies have more resources to comply and therefore O’O's will fall by the wayside. This CAN be true or NOT. If you want to be competitive in the market, go the extra mile and comply and you can be more profitable as the rates go up due to attrition in the industry.

  • William McKelvie

    Come on, more speculation that rates are going up? The only thing to make the rates go up, is for the cheap haulers to stop hauling cheap, period.

  • KRV

    The only way rates will go up is when cheap haulers can’t afford to stay in business.. but another will come to take their place .. and Brokers or Logistic companys that tell customers that they will move all their freight and want you to move it for less than $2.00 per mile gross including fuel surcharge .. they want flat rates all in then want you to haul more weight for the flatrate …
    It can change out here but not when Logistic companys use words like ” Back Haul” so you can do it cheaper .. It cost the same to drive back as it does to go … at least for us it does …. and when did a back haul become every load they want you to haul …
    So , when more people say ” NO” and don’t haul any cheap load just to have a load on the truck ( even if they aren’t making a profit)
    it could change the rates …

  • Jon McLaughlin

    The brokers will pocket the increase and the drivers will not see a penny more, or will get even less so the BROKER can continue to buy a new Beamer every year. They will continue to keep the Fuel Surcharge that they charge on ALL loads and we O/O’s will end up going bankrupt. Ray LaHood will continue to profit from his policies that have put our freight on BNSF rail cars and dividend money in his pocket.

  • Daryl Wirth

    it doesn’t matter what happens they will always bitch about it

  • g

    Exactly what is going on!!

  • PattyCakes

    Will the fool(s) wondering why amnesty for Illegal Aliens is a Pressing Issue in Washington, ‘ Please Stand-Up ‘ !

    Anyone put 2 and 2 together yet …. ‘ Hey boys + girls, we need a few bodies with a pulse to fill seats, where on earth will we ever get enough of them to do the jobs ” That Americans just won’t do ” ?

    Shazaam …. we have the necessary bodies !

    Will the fool(s) who think the driver shortage is going to Increase Driver Compensation, while amnesty is such a Hot Topic, Please Raise Your Hand.

  • PattyCakes

    Pal, you’re nothing but a ‘ Part of the Revolving Talent Pool ‘, just like the rest of us Dime a Dozen folks.

    Ask any Exec at JB or similar size Talent Pool User, just how many drivers they turn over in a years time …. last I knew JB was in excess of 10,000 drivers per year !

    Hire ‘em … Use / Abuse ‘em … Fire ‘em … Blackball ‘em …… it’s Standard Procedure.

  • Daryl Wirth

    its up to the driver to get a better rate not the broker

  • Sasha Renfrow

    AMEN!!!

  • Sasha Renfrow

    ITS UP TO BOTH!

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